College graduates surfing for jobs, drowning in debt and seeking a bailout

HOUSTON, Texas - Many college students, past and present, are wondering how banks and auto makers are being bailed out while there is no lifeline for those drowning in student loan debt while jobless or making little money with a college degree.

“It can be extremely depressing at times,” said Saeeda Shabazz, 23, who graduated from Emerson College in Boston with a major in theatre studies. Since graduating in 2008, things have not gone according to plan.

Because she had no job offers coming out of school, she resorted to babysitting after returning to her parent's home. She was making enough to get by until she lost that job. Now she's even having trouble getting employment at a local bookstore and the interest rate on her student loans is increasing.

“I have a degree and can't even get a job at Borders or Barnes & Nobles. I have already put my loans in deferment twice. So at this rate I will pay them off by the year 2028,” she said. “Many of my friends are working at malls with degrees and have student loans as well. Where is the bailout for the college students?”

According to an article in the Baltimore Sun, New York attorney Robert Applebaum is pushing an online campaign to ask that all student debt be forgiven. In late January, he launched a Facebook.com networking group and has more than 160,000 members to go along with 50,000 signatures on a petition that will be delivered to the halls of Congress.

“I see it as targeted relief to people who are obviously lower and middle class, and it rewards responsibility,” said Mr. Applebaum, who owes over $95,000 on law school loans. “These people didn't take out these loans to live high. They did it to better themselves.”
Mr. Applebaum estimates that total student loan debt nationwide is roughly $600 billion, which he says is nowhere near the figures handed out to banks. Although the idea is being disputed by many economists, the online forum created by Mr. Applebaum has been covered in news outlets throughout the world.

“For the record, I have never defaulted on my student loans, nor do I intend to. This group is about promoting an idea concerning a different way of accomplishing the goal of stimulating the economy,” he said in a statement on Facebook.

“To bailout student loans would only mean that we would have to pay our tax dollars for somebody who made the decision to go into debt. Would that be fair?” asked Brenda Washington, a financial advisor in Houston. “Don't get me wrong, I believe something should be done about the student loan debt but I don't know if his suggestion will stimulate the economy.”

Is a college degree worth the hassle?

Hannibal Muhammad, 25, is only one semester away from finishing at Texas Southern University with a degree in business management. But he has had no internships, was purged one year for lack of money, suspended due to low grades and does not see any job security when he finishes.

“I am not surprised that I don't have a job locked down in my major because this is the time to create a job for ourselves,” said Mr. Muhammad, who is originally from Phoenix. Since moving to Houston to attend college his sources of income have been a job at Wal-Mart and working as a senior level banker at First Convenience Bank.

He has since launched Sirboya Enterprises to provide marketing, graphic designing and business consulting services. “So what I am doing at this point is learning as much of the theories from class and seeing how I can use it to build up my business. College students need to start thinking about what type of businesses they want to own.”

The average national cost of total college expenses has increased nearly 100 percent over the last 30 years from $7,857 in 1977-1978 to $15,665 in 2007-2008. But the median household income has only risen 18 percent over that same period, from about $42,500 to just over $50,000. This means, college costs have gone up more than five times the rate of incomes. For parents, that is an issue.

“I can see how so many students decide not to go to school. They are seeing the damaging effects of getting student loans and their parents can't afford it,” said Jackie Thompson, whose daughter attends Southern University at Shreveport. “If my daughter had not received a scholarship, I don't know what we would have done. So many children in poor families can't go to college. But some families have the money.”

Such is the story of Plez McConnell, 24, who graduated in 2007 from TSU with over $30,000 in student loan debt. He will have his loans paid off by next year because “I am blessed to have parents and family members who help me out. I didn't have a job in my major upon graduating. I worked at a radio station and a law firm. Having a job coming out of college is really dependent on the field you study,” he said.

According to the 2008 National Report Card on Higher Education, a family in the country's lowest-income bracket now has to pay, on average, 55 percent of their total income (up from 39 percent in 2000) for a child to attend a four-year public university. For a middle-income family, the average is 25 percent (up from 18 percent in 2000); and for an upper-income family, 9 percent (up from 7 percent).

Financial aid disparities?

A 2006 report by The Education Trust titled Engines of Inequality, revealed that most schools in 2003 spent a little over $170 million in aid on students from households making less than $20,000 a year. About $257 million went to students from households earning over $100,000 a year.

“And just think, it is far worse than that now,” said Dwayne White, an economist based in Austin. “More and more historically Black colleges and universities have seen an increase in White students enrolling over the last eight years or so and they are getting the larger share of financial aid. Plus laws surrounding student loans are getting tighter.”

A 2008 poll by the National Center for Public Policy and Higher Education found that 31 percent of those polled believe that a college education is necessary for a person to be successful in the work field; more than 60 percent believe that many people who are qualified don't have the opportunity to go to college; and 59 percent said college prices are rising as fast or faster than prices for health care.

The poll also found respondents were aware that financial aid is available (mostly in the form of loans), but 78 percent agreed, either strongly (60 percent) or somewhat (18 percent), that students have to borrow far too much to pay for higher education. And according to their research, the majority of those impacted are Black and Hispanic households.

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